What Is Web Analytics? How Do I Optimize for Conversions?

"Half the money I spend on advertising is wasted; the trouble is I don’t know which half." This popular saying is as true today as when it was coined by marketing pioneer John Wanamaker a century ago. That is, it’s almost as true, because today online marketers have a powerful solution to this problem in web analytics.

Analytics is defined by the Web Analytics Association as “the objective tracking, collection, measurement, reporting and analysis of quantitative Internet data to optimize websites and marketing initiatives.” In short, it’s how you determine the effectiveness of your marketing efforts, gather the data you need to fine-tune your site and ultimately maximize your return on investment (ROI). Every single discipline of Internet marketing relies heavily on analytics.

Why Analytics Matters to You

Web analytics allows you to access valuable information undreamed of by pre-Internet marketers:

Target Your Audience. See who your typical customers are and how they get to your site. Age, gender and other factors influence how people interact with your website.

Check Your Conversion Path. Measure the loss between any two steps on the way to conversion. You will need this data in order to perform Conversion Rate Optimization (CRO).

Maximize Your Return on Investment. Evaluate the effectiveness of your various marketing methods. Are your pay-per-click keywords paying off? Have you optimized your site for the right search terms? What kind of boost are you getting from your social media marketing strategy?

Web Analytics Tools

There are two basic methods for collecting analytics data:

Log files: Your server already produces this data, which capture every detail of a user’s interaction with your site. Various free and paid analytics services can interpret the data for you, or you can outsource it to an analytics company.

Page tagging: Also known as “web bugs,” this method gathers data via the user’s browser rather than your server. Page tagging requires signing up for an analytics service and adding JavaScript tags to each page on your site, and tends to be more accurate than log files.

Log files and page tagging each have distinct advantages and disadvantages for analytics strategies.

Tracking User Activity Is an Ongoing Process

The Internet changes quickly, so a successful web analytics strategy must include a continuous improvement program (CIP) in order to stay ahead of your competition.

Key Performance Indicators (KPI): Create a set of measurable factors you use to gauge your success so you can consistently chart your site’s long-term performance.

Testing: Test changes to your site and use this data to make continuous improvements.

Consistency: Controlled testing will allow you to more accurately predict what effect changes will have on the site.

On our site we share analytics tutorials and tools from experts, as well as information on training and services offered by analytics professionals. Check our blog for regular updates on new developments in website analytics.

Conversion Rate Optimization

You've probably put a lot of time and resources into SEO, PPC and social media, and you're finally getting a solid stream of visitors to your site — your incoming traffic is like water from a faucet, and your website is the bucket that collects it. The problem is, your bucket is full of holes. Users come to your site and leave just as quickly.

And it's not just you: industry-wide conversion rates hover around 3 percent, which means that 97 out of every 100 visitors enter a site and leave again without taking any desired action. And as many as 70 percent of online shopping carts are abandoned before checkout.

Driving traffic to your site will do nothing for your bottom line if you're not getting conversions from your visitors. This is why conversion rate optimization is necessary. You must plug as many holes in your bucket as possible in order to prevent all your hard work from going down the drain.

Conversion rate optimization (CRO) is the practice of researching your audience and their browsing habits, then testing different versions of your site's pages to determine how best to guide visitors toward a conversion and ultimately, give them what they want and need.

Know Your Audience

The first step in a successful conversion optimization strategy is research. Examine data from web analytics in order to see who typically visits you, how they get to you and how they navigate within your site. With this data you can create personas based on your prototypical visitors in order to view your website through their eyes.

Remember, it's not about what you think works, it's about what actually works, and analytics data helps you to target your actual customers, not just those you think are your customers.

Now that you know your audience, you need to decide your goals for them. Define a conversion based upon your site and its purpose — selling a product, generating leads, customer service, etc. Plot out the step-by-step path to conversion and create a sales funnel so you can see where your customers are dropping off.

Conduct Testing

As any CRO expert will tell you, rigorous scientific testing lies at the heart of successful conversion rate optimization strategies. You may think up all sorts of ideas that could raise your conversion rate, but you'll never know whether or not they're effective until you collect and analyze hard data.

The two types of testing are A/B split and multivariate. With A/B split testing, you create two or more versions of a page and then divide your traffic between them. The analytic data can show you which version is outperforming the other and producing more conversions, your new page or the original page.

Multivariate testing involves creating different versions of individual elements shared across many pages. Because users are shown all possible combinations of elements randomly, multivariate testing requires a high volume of traffic to produce useful results that can be analyzed.

Bruce Clay Japan offers CRO services that can help you fine tune your site and maximize conversions. Stop wasting your precious online traffic; start optimizing for conversions today. And to place this into perspective, you can surpass the competition by paying attention to the subtleties — focusing on emotional impact, persona, community, intent, and individualization of results. These are the elements that keep Conversion Rate Optimization exciting and differentiate us from our competition.

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